I spoke on the most recent
episode of my podcast about the recent collapse of HMV and other high street
retailers. I didn't really speak at length about it because I figure my podcast
is more for jokes rather than for me dissecting the problems faced by the
British economy. But that’s the nice thing about having a blog, if you don’t
want to read about the economy you could just skip this post. Don’t though
because I assure you that it’s going to be well interesting.
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| See also: every shop in Britain |
The media narrative of the
collapse of HMV, Jessops, Game, et al. (and indeed the narrative coming from
those companies themselves) is that they have been crippled by the growth of
online retailing and by rising rents on their stores. According to this view falling
sales and rising costs were squeezing their profits. This view is easy to
understand, which is probably why it is being pedalled. It is also false. HMV
stores were all cash profitable, that is to say they were taking in more cash than
they were spending because there are a lot of people (myself included) who still
prefer to buy things in shops than over the internet. So why have they actually
gone bust?
